Tax News

CCH (cch.taxgroup.com) reports:

  A Congressional Budget Office (CBO) estimate that shows a $250-billion budget deficit under the Democratic health care reform bill does not take into account projected Medicare cost savings, according to House Ways and Means Chairman Charles B. Rangel, D-N.Y., who spoke on CBS News' "Face the Nation" on July 19. Rangel said that the more money lawmakers can cut out of Medicare, the less taxes will have to be raised under the America's Affordable Health Choices Bill of 2009 (HR 3200). The CBO did not score savings from fewer people getting sick or being admitted to the hospital because they receive preventive care, Rangel said. He added that the CBO is obviously using different assumptions that what Ways and Means and the White House are considering.

  Senate Finance Committee member Orrin G. Hatch, R-Utah, speaking on the same program, said that GOP lawmakers are not going to accept a Democratic proposal for a surtax on the wealthy. The Democratic bill will result in small business owners having a 45.7-percent tax rate --an amount that is higher than the corporate tax rate, he said.

  However, Rangel disputed that the small businesses would be hurt by taxes, since the legislation provides tax credits as well as exemptions for smaller firms. He said the bill represents a tax on less that 1 percent of the wealthiest people in America, not on small businesses. Hatch said the Senate Finance negotiations on the health care bill are working on the idea of Chairman Max Baucus, D-Mont., to tax health care benefits that cost over $25,000. Hatch said he does not support that plan, either.

  By Stephen K. Cooper, CCH News Staff

Congressional Budget Office Preliminary Analysis of Estimate of Effects on the Deficit and Effects of Key Provisions of HR 3200, America's Health Choices Act of 2009